Investing in France

General information

France is the sixth largest economy in the world and a wide range of multinational companies are headquartered in this country. A few examples of industries within which French companies have distinguished themselves are insurance, energy, automotive, biotechnology, mass media, fashion, cosmetics, and luxury beverages.

Direct investments into share companies is far from the only thing that France has to offer; this is a popular market for investors seeking to yield a profit from derivatives, investment funds, bonds and real estate – just to mention a few of the available opportunities.

Work force

France ranks among top-10 on the list of countries with the highest labor productivity per hour.

Data from the year 2013 show that 44% of the population aged 30-34 where higher-education graduates.

GDP (PPP) per hour worked

Rank

Country

GDP (PPP) per hour

in USD

1

Norway

75.08

2

Luxembourg

73.22

3

United States

67.32

4

Belgium

60.98

5

Netherlands

60.06

6

France

59.24

7

Germany

57.36

8

Ireland

56.05

9

Australia

55.87

10

Denmark

55.75

The GDP (PPP) per hour worked is a measure of the productivity of a country when not taking into account unemployment or hours worked per week. GDP (PPP) stands for gross domestic product normalized to purchasing power parity. The list below is based on data from The Coference Board and Eurostat, and is for the year 2013.

Legal improvements for employers and investors

In the year 2007, the French government reformed the tax system and made several important changes concerning labor law and corporate law. As a result, French employers came to enjoy a higher degree of flexibility than before, which boosted the foreign interest in investing in French corporations. In 2010, the government implemented tax reduction policies on productive investments to sugar the deal even more.

Bureaucracy

The word bureaucracy was invented by the French and France is still known to be a comparatively bureaucratic country that can take some time getting used to if you are a foreign investor wishing to do business on the ground there rather than limit yourself to being a silent owner of shares, bonds, ETFs, and so on. Seeking legal counseling is advisable, especially if your French is a bit rusty.

Fortunately, France is now moving speedily into e-administration and a wide range of government services are already offered online, decreasing the need for natives and foreigners alike to sit and wait in the offices of civil servants for their issues to be addressed.

Investing in French real estate

You don’t have to be a French citizen or even resident to directly or indirectly invest in real estate in France, and the real estate market is also open for foreign companies and other entities.

Generally speaking, real estate prices are high in France compared to other parts of mainland Europe, but there is of course notable variations depending on location within the country.

Most of the real estate in France is freehold.

Apartments tend to be leaseholds (up to 99 years) or freehold with co-ownership. Co-ownership will typically entail regular owners meetings where common issues are voted on.

When it comes to renting out properties, rental contracts in France tend to be long term and fraught with legal restrictions, of which most are intended to protect the renter rather than the owner. This should be taken into account before investing in French real estate with the ambition to make a return from renting it out.

Please note that if you are transferring money from abroad to France to pay for your real estate purchase, it is advisable to have a bank or money transfer agency provide you with a certificate to the notary for the purchase, since this makes it easier for you to become eligible for the best tax benefits.

French ETFs

During recent years, Exchange Traded Funds (ETFs) have sailed up as a popular choice among foreign investors seeking exposure to the French market. Exchange Trades Funds make it easy to buy and sell fund shares (units) and adjust your exposure according to your own preferences and predictions.

Always research several France-focused ETFs wells before you make any investment decision, because they vary greatly when it comes to things such as diversification, industry selection, risk level and fees / costs / commissions.

French binary options

Binary options have become very popular during recent years. Binary options is a controversial type of financial instrument that let you speculate on whether a certain financial instrument will have a higher or lower value at a certain time in the future. This time might be as near as 15 seconds and as far as 1 month into the future. If you correctly predict the future then you get a high predetermined return. Some see binary options as a great way to make money while other see them as a scam.

French binary options are options based on French companies. Most french binary options are based on companies listed on the DAX index. Most binary options brokers offer options based on french stock.

If you want to trade binary options in France you need to register with a broker that is license in the UK, on Cyprus or on Malta. There are no brokers licensed in France. A broker that is licensed in the UK, on Cyprus or on Malta is allowed to offer their service in the Entire EU region.

UPDATE: Binary options have been banned in EU. They can no longer be offered to retail investors.

American Depository Receipts

American Depository Receipts (ADR) are negotiable security representing securities of a non-U.S. company that trades in the U.S. financial markets. ADR:s were introduced by J.P. Morgan in 1927 for the British retailer Selfridges on the New York Curb Exhcange. Today, AD:s can be a great way for investors to gain exposure to the French market. ADR:s are traded during U.S. trading hours through U.S. broker-dealers. The depository bank will manage all custody, currency and local taxes issues.